The Magic of Bitcoin Turns FBI’s Seized Booty Into Government Protest

In the past, citizens would take to the streets to protest the government. Now, they take to the bitcoin block chain. Photo: Steve Rhodes/Flickr

The FBI seized over $3.3 million in digital currency after busting up the online drug market known as The Silk Road, and on Friday morning, someone spotted what is likely the online address where the feds are keeping all that money. The seized funds are in the form of bitcoins, the world’s most popular digital currency, and bitcoin addresses are public things. You can’t take the money, but you can see it.

That someone then started broadcasting the address on the popular discussion website Reddit. And pretty soon, the address turned into something else.

You see, anyone can transfer money into a public bitcoin address, and when you transfer, you can post a message that’s as public as the transaction. Within hours of the address being discovered, anonymous protesters started peppering the address with messages accusing the feds of blatant hypocrisy in taking down the Silk Road. Call it a protest by payment.

It’s yet another example of the way Bitcoin changes the role of money in the world. With Bitcoins, money isn’t just money. It’s something that can serve so many other purposes.

The first protest message came in at 11:05 today, and it was a bit oblique: “This is a loan for standard interest.” It contained a link to a story about $20 billion in cash abandoned at Moscow’s Sheremetyevo airport, and a second link to a documentary about life after death. It cost 0.001 bitcoins, about a tenth of a cent.

Someone getting clever with the address.

Then the protesters became a bit more obvious. “Members of the FBI, are you more interested in control or in justice?,” wrote one. Another said: “This is a donation for the US government which is in desperate need for money these days. Consider this a small contribution to get around the fiscal cliff.”

The FBI didn’t respond to our inquiries — made both by telephone and bitcoin micro-payment, naturally — so we’re not 100 percent sure that the protesters have hit the right address.

But Sarah Meiklejohn, a University of California, San Diego, graduate student who has studied bitcoin payments on the Silk Road, says that some of the money in the protest address came from addresses that linked to the drug bazaar. Contacted via email, she said, it’s “quite likely that this address belongs to the FBI.”

Jerry Brito, senior research fellow at the Mercatus Center at George Mason University, says this shows just how complex things are in the world of bitcoins. In a way, Bitcoin transactions are anonymous, but once you link an address to someone, you can see everything they’ve done there. “What’s funny is that this demonstrates how transparent and non-anonymous Bitcoin transactions are,” he says. “The fact that people on Reddit can use pattern analysis to uncover the federal government’s transactions on the block chain shows that it’s not as anonymous as some think.”

In many ways, it’s the most public of currencies. And that changes the very nature of money. When the feds seize cash, you can’t protest them in quite the same way.

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